Some Evidence on the Uniqueness of Initial Public Debt Offerings

Debt initial public offerings (IPOs) represent a major shift in a firm's financing policy by both extending debt maturity
and altering the public‐private debt mix. In contrast to findings for seasoned debt offerings, we document a significantly
negative stock price response to debt IPO announcements. This result is consistent with debt maturity and debt ownership structure
theories. The equity wealth effect is negatively related to the offer's maturity, and positively related to the degree of
bank monitoring. We find that firms with less information asymmetry and firms with higher growth opportunities experience
a less adverse stock price response.